India and Qatar boost trade, energy security, and investment, aiming to double bilateral trade to $28B while exploring a Free Trade Agreement
The decision of India and Qatar to deepen economic ties between them will be mutually beneficial and augurs well for regional security in both West Asia and South Asia. While closer ties with Qatar, the largest supplier of liquified natural gas (LNG) and liquified petroleum gas (LPG), offer energy security to India, unrestricted access to the Indian market will allow Qatar to benefit from the economic rise of the world’s fifth largest economy.
Qatar is expected to invest $10 billion in India, after it remained a low participant in the country’s economic success as it had invested a partly sum of $1.5 billion in the last 24 years. Bilateral trade has also declined to $14 billion in 2023-24 from $18.77 billion in 2022-23 and the countries aim to double the trade to $28 billion.
During the talks between Prime Minister Narendra Modi and Qatar’s Emir Sheikh Tamim bin Hamad Al Thani, both countries have agreed on signing an agreement to avoid double taxation. Both the countries have also decided to explore the possibility of entering into a Free Trade Agreement (FTA). India has already established strategic partnerships with the UAE, Saudi Arabia, Oman and Kuwait.
However, India should tread carefully on the free trade proposal with Qatar as the Gulf nation is strong in the petrochemical sector as it could impact the Indian petrochemical industry adversely. As Qatar has free trade deals with other countries like China, among others, officials should ensure that the Chinese importers do not use Qatar as a conduit to export their products into India.
It is obvious that every country wants to trade with the fifth largest market in the world. However, India must not give in to their demands without extracting concrete promises to invest in the upgradation of the Indian industries.
